Shares of Tata Motors rallied by up to 4% to Rs 675 on Tuesday, becoming the top gainer on the Nifty 50 index. The jump followed a major announcement: shareholders have given an overwhelming 99.99% approval to the demerger of the company’s Commercial Vehicle (CV) business into a separate listed entity.
This move is part of Tata Motors’ broader strategic restructuring, initially announced in March 2024. Under the approved plan, all existing shareholders will receive one share of the new CV entity for every Tata Motors share held.
While the broader Nifty has risen around 2% so far in 2025, Tata Motors stock had underperformed until recently, declining by approximately 10%. However, the stock has rebounded nearly 15% over the past month, buoyed by restructuring optimism and supportive macro developments.
Adding to the momentum, the recently signed India-UK Free Trade Agreement (FTA) has reduced auto import tariffs from over 100% to 10% under a specific quota. Though the quota details remain pending, the tariff reduction could significantly benefit Jaguar Land Rover (JLR), Tata Motors’ UK-based subsidiary, by making its premium vehicles more accessible in India.
Investors and analysts are now closely watching how the demerger and trade agreement will reshape Tata Motors' growth trajectory in both domestic and international markets.
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